Tuesday, July 27, 2010

Bookkeeping: Short Energizer (ENR)

Overall market view - this was a much needed pullback.  Commodities are being bum rushed as student body left turns into student body right.  U.S. Steel (X) - which is U.S. and European based - NOT Asia is showing the danger of the earnings reports in the coming 2 weeks; companies much more focused on America rather than Asia.  If we close above S&P 1113 today will have been a very excellent day of consolidation for bulls, and any closes over 1100 still call for 'buying on dips'.


That said, on the bear side one of my old legacy limit short orders hit today - just noticed.  It was short Energizer (ENR)... and it seems earnings have driven the stock up... way up!  Normally when a stock moves up like this on news to trigger a short that was based on technicals, I'd immediately sell the position (even if at a small loss) since my reason for the short sales are not the reason the price triggered, but since I have a decent entry price I will keep it on and see if the stock struggles in the next day or two.  I'd be giddy (and lucky) if the gap down in the $55s filled.

My short entry was $59.99; obviously that was not where the order was placed but the stock gapped up off earnings and has been going sideways all day.  I'll give this a just over 3% stop loss at $62.  Again this is not something I'd walk in today if presented the chart and short, but since we have it on - let's give it a whirl with a very tight stop. Just over $62 we'll exit.  (we have about a 2.2% exposure)

I'm off to research how much of ENR's sales are from overseas!
  • Q3 revenue was up 8% at $1.076 billion, slightly exceeding the $1.07 billion expected. Profit per share of $1.35, excluding a couple of one-time tax gains, was 39 cents ahead of estimates.   Currency fluctuations boosted gross profit by 2 percentage points, to 48% of sales, while selling, general and administrative costs rose slower than sales, at just 5%.
Short Energizer in fund; no personal position


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